LONDON, June 24 (Reuters) - The euro slipped against the
dollar on Friday as a short-covering bounce fizzled out on
lingering uncertainty about the fate of Greece's austerity plan,
and could lose more ground if a key German business survey
disappointed investors.

The IFO survey is expected to show some weakness
and will back views that growth in Europe's largest economy is
entering a soft patch, hurting demand for the common currency.

The euro was last down 0.3 percent at $1.4219, with
its bounce from a low of $1.4125 on Thursday, running out of
steam. It fell to a session low of $1.4197, after stops were
triggered under $1.4230 in light trade with traders citing
selling by macro funds.

It had risen as high as $1.4279 following news that Greece
had reached a deal with international lenders on an austerity
plan that would bring it one step closer to securing much-needed
financial aid.

"The euro is struggling a bit and this deal isn't really a
game changer," said Jeremy Stretch, head of currency strategy at
CIBC World Markets. "It just brings into focus the hurdles the
Greeks have to cross with these austerity measures."

Indeed, the Greek government's austerity plan, including
deep spending cuts and more tax hikes, must still be passed by
the Greek parliament at a vote next week.

"The potential for further uncertainty suggests that the
euro could pull back as quickly as it has rallied on the first
sign of trouble," said David Rodriguez, strategist at DailyFX.

Market players cited talk of euro offers around $1.4290,
which looked set to cap the currency for now. All eyes will be
on the German IFO numbers and Stretch at CIBC World Markets said
a weak outcome could weigh on the euro.

The euro fell against the Swiss franc to 1.1905 ,
heading towards a record low of 1.18470 struck on Thursday on
trading platform EBS.

Recent signs of dollar funding strains may also weigh on the
euro against the dollar, with investors watching to see whether
European banks' dollar funding demand will increase in currency
forwards and cross-currency basis swaps.

Dollar funding costs implied by euro/dollar one-year cross
currency basis swaps as well as three-month euro/dollar forwards
had both risen on Thursday , pointing to an
increase in dollar funding demand through such instruments.

"If banks can borrow in interbank (money) markets even if
they have to pay a premium, then that would be ok. If not, they
may have to just buy dollars, although that would be something
of a last resort," said Tsutomu Soma, senior manager for Okasan
Securities' in Tokyo.

Such signs of increased dollar funding demand could lend
support to the greenback in the currency market, right at a time
when the dollar index, which measures the dollar's value against
a basket of currencies, is flirting with a break of trendline
resistance drawn off a peak reached in June 2010.

The dollar index last stood at 75.291 ,
hovering close to the trendline resistance that lay right around
75.64.

A rise above that resistance and the mid-June high of 76.015
could set the dollar index up for further gains, with the next
major peak on charts coming in at 76.366. Above that, the
200-day moving average lies at 77.218.

The dollar was flat against the yen at 80.54 yen . A
trader at a Japanese brokerage said strong bids were supporting
the dollar at levels below 80.50 yen, while dollar offers were
seen roughly around 80.80 yen to 81.00 yen.

Sterling, which slumped to a three-month lows around $1.5938
on Thursday, was down 0.2 percent at $1.5977.

The pound came under selling pressure this week after
minutes of the Bank of England's June meeting flagged prospects
of another round of stimulus through quantitative easing (QE),
or asset purchases.
(Additional reporting by Masayuki Kitano in Singapore; Editing
by)